Shares of generic drug makers fell sharply Monday, after a Washington Post report that an antitrust lawsuit brought by states over two drugs in 2016 has expanded into a major probe of alleged price-fixing. The case now involves at least 16 companies and 300 drugs, the report said, citing Joseph Nielsen, an assistant attorney general and antitrust investigator in Connecticut, who has been a leader in the probe. Nielsen is quoted as saying, "this is most likely the largest cartel in the history of the United States." The victims were consumers and taxpayers, who have been carrying the high cost of overcharges on common antiboitics, blood-pressure medications, arthritis treatments, anxiety pills and more, said the report. Teva Pharmaceuticals Industries Ltd. ADRs fell 5.7% on the news. Mylan NV was down 4.6%, and Dr. Reddy Labs Ltd was down 3%. Abbott Labs was down 1.4% and Pfizer Inc. was down 1.6%. The S&P 500 was down 1.8% and the Dow Jones Industrial Average was down about 2%.

The Securities and Exchange Commission settled its insider trading charges against James V. Mazzo, the former Chairman and Chief Executive Officer of Advanced Medical Optics, Inc. who agreed to pay $1.5 million for allegedly tipping information about his company's acquisition to his close personal friend, former professional baseball player Doug DeCinces. The SEC alleged Mazzo provided DeCinces with material, nonpublic information about the potential acquisition of AMO by Abbott Laboratories, Inc. The SEC's complaint said DeCinces bought AMO securities numerous times after communicating with Mazzo about the progress of the merger talks and then allegedly tipped five more of his friends, including a former Baltimore Orioles teammate and a businessman, Dave Parker for a trading gain of over $1.3 million for DeCinces another $1 million in gains for his friends. DeCinces and four of his tippees already settled the Commission's insider trading claims against them. The SEC's litigation against Parker is continuing. Mazzo neither admitted nor denied the allegations and also agreed to a five-year officer-and-director bar.

Abbott Laboratories stock dropped 2.3% in Wednesday premarket trade after the company reported third-quarter profit that was in-line with the consensus but narrowed its 2018 profit outlook. Earnings for the latest quarter declined to $563 million, or 32 cents per share, from $603 million, or 34 cents per share, in the year-earlier period. Adjusted earnings-per-share were 75 cents, in line with the FactSet consensus. Revenue rose to $7.66 billion from $6.83 billion, above the FactSet consensus of $7.65 billion. Sales for the company's medical devices, nutrition and established pharmaceuticals units beat the FactSet consensus, while sales for diagnostics missed, at $1.82 billion to the FactSet consensus' $1.83 billion. Abbott now expects 2018 EPS from continuing operations of $1.33 to $1.35, compared with previous guidance of between $1.34 and $1.40. Abbott shares have surged nearly 13% over the last three months, compared with a 0.01% rise in the S&P 500 and a 2.7% rise in the Dow Jones Industrial Average .

Abbott Laboratories

Abbott Laboratories engages in the discovery, development, manufacture, and sale of a broad and diversified line of health care products. It operates through the following segments: Established Pharmaceutical Products, Nutritional Products, Diagnostic Products, Cardiovascular and Neuromodulation Products, and Other. The Established Pharmaceutical Products segment refers to the international sales of a line of branded generic pharmaceutical products. The Nutritional Products segment caters to the worldwide sales of adult and pediatric nutritional products. The Diagnostic Products segment markets diagnostic systems and tests for blood banks, hospitals, commercial laboratories, and alternate-care testing sites. The Vascular Products segment trades coronary, endovascular, structural heart, vessel closure, and other medical device products. The Other segment comprises of Abbott Medical Optics. The company was founded by Wallace Calvin Abbott in 1888 and is headquartered in Abbott Park, IL.
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